Table 11. Sources of cash holding...

Table 11.

Sources of cash holding increases

	CFI	CFF	Debt issuance	Dividends
Dependent variable	(1)	(2)	(3)	(4)
LMR	–0.005 (−0.53)	–0.034 (−1.34)	–0.021 (−1.10)	0.008** (2.17)
LMR#FFF	0.002 (0.22)	0.059** (2.17)	0.010** (2.27)	–0.016** (−2.77)
FFF	–0.034 (−0.59)	–0.376* (−1.81)	–0.021 (−0.88)	0.057** (2.72)
Size $_{(t - 1)}$	–0.000 (−0.00)	–0.127*** (−3.31)	–0.016** (−2.80)	0.035*** (7.92)
Growth $_{(t - 1)}$	0.020*** (3.44)	0.065*** (4.18)	0.014 (1.48)	0.004** (2.79)
Tangibility $_{(t - 1)}$	–0.325 (−1.41)	–0.577* (−1.89)	0.054** (2.15)	–0.011 (−0.46)
NWC $_{(t - 1)}$	0.187** (2.33)	0.033 (0.21)	–0.151*** (−3.19)	0.155*** (4.21)
Cash $_{(t - 1)}$	0.962*** (3.66)	0.235 (0.62)	–0.176** (−2.70)	0.230*** (5.19)
Other ultimate owner	0.004 (0.44)	0.042 (1.61)	0.028 (1.40)	–0.000 (−0.03)
Inflation $_{(t - 1)}$	–0.750** (−2.46)	–2.044*** (−2.96)	0.530 (1.31)	–0.568** (−2.90)
GDP growth $_{(t - 1)}$	–0.163 (−1.34)	–0.257 (−0.63)	0.092 (0.47)	0.671*** (5.36)
ln(GDP p.c.) $_{(t - 1)}$	0.322** (2.52)	1.539** (2.61)	0.069 (0.47)	–0.388*** (−3.47)
Firm fixed effects	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level
Observations	27,918	27,856	24,320	26,628
$R_{a d j}^{2}$	0.084	0.051	0.027	0.063

	CFI	CFF	Debt issuance	Dividends
Dependent variable	(1)	(2)	(3)	(4)
LMR	–0.005 (−0.53)	–0.034 (−1.34)	–0.021 (−1.10)	0.008** (2.17)
LMR#FFF	0.002 (0.22)	0.059** (2.17)	0.010** (2.27)	–0.016** (−2.77)
FFF	–0.034 (−0.59)	–0.376* (−1.81)	–0.021 (−0.88)	0.057** (2.72)
Size $_{(t - 1)}$	–0.000 (−0.00)	–0.127*** (−3.31)	–0.016** (−2.80)	0.035*** (7.92)
Growth $_{(t - 1)}$	0.020*** (3.44)	0.065*** (4.18)	0.014 (1.48)	0.004** (2.79)
Tangibility $_{(t - 1)}$	–0.325 (−1.41)	–0.577* (−1.89)	0.054** (2.15)	–0.011 (−0.46)
NWC $_{(t - 1)}$	0.187** (2.33)	0.033 (0.21)	–0.151*** (−3.19)	0.155*** (4.21)
Cash $_{(t - 1)}$	0.962*** (3.66)	0.235 (0.62)	–0.176** (−2.70)	0.230*** (5.19)
Other ultimate owner	0.004 (0.44)	0.042 (1.61)	0.028 (1.40)	–0.000 (−0.03)
Inflation $_{(t - 1)}$	–0.750** (−2.46)	–2.044*** (−2.96)	0.530 (1.31)	–0.568** (−2.90)
GDP growth $_{(t - 1)}$	–0.163 (−1.34)	–0.257 (−0.63)	0.092 (0.47)	0.671*** (5.36)
ln(GDP p.c.) $_{(t - 1)}$	0.322** (2.52)	1.539** (2.61)	0.069 (0.47)	–0.388*** (−3.47)
Firm fixed effects	Yes	Yes	Yes	Yes
Industry-Year fixed effects	Yes	Yes	Yes	Yes
Country specific year trend	Yes	Yes	Yes	Yes
Clustered standard errors	Country-level	Country-level	Country-level	Country-level
Observations	27,918	27,856	24,320	26,628
$R_{a d j}^{2}$	0.084	0.051	0.027	0.063

Note(s):

This table presents the results of OLS regressions of mechanisms behind the increases in cash holdings in family firms, compared to non-family firms. The analyses are conducted using interaction terms between labor market regulations and family firms (LMR#FFF). The dependent variables are Cash Flow from Investment Activities divided by Total Sales (⁠ $t - 1$ ⁠) (Column 1), Cash Flow from Financing Activities divided by Total Sales (⁠ $t - 1$ ⁠) (Column 2), Long Term Debt Issuance divided by Total Assets (⁠ $t - 1$ ⁠) (Column 3), and Dividend Payout divided by EBIT (⁠ $t - 1$ ⁠) (Column 4). All variables are defined in Table A1 in the Appendix. All independent variables except LMR, FFF, and Other Ultimate Owner are lagged by one period. All regression specifications include firm fixed effects, industry-year fixed effects, and country specific year trends. The t-Statistics in parentheses are based on robust standard errors, clustered at the country level. *, **, *** denote statistical significance at the 10, 5, and 1% levels, respectively

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